BMPs were initially isolated from bone extracts based on their ability to promote bone formation. Today these bone induction activities are sought after in several clinical applications;for example, ectopic applications of recombinant BMPs have increased to some extent the success of dental implants. The clinical applications are however limited by our poor understanding of the mechanisms for localization and concentration of BMP activities. We think that various strategies utilized by the fruit fly to ensure formation of robust/reliable BMP morphogen gradients over relatively long distances may offer exquisite solutions. The Drosophila embryo uses a gradient of Decapentaplegic (Dpp), a homologue of the vertebrate BMP-2/-4, to specify the dorsal structures. In the early embryo, dpp is transcribed uniformly throughout the dorsal domain, yet it forms an activity gradient in which only about 10% cells along the dorsal midline receive high levels of signal and specify the amnioserosa. In the pupal wing, Dpp diffuses from the longitudinal veins into the posterior crossvein competent zone and creates a corridor of peak signaling that is perpendicular to the source of morphogen. In both instances, the formation of the Dpp gradient occurs at a post-transcriptional level and involves modulation by additional secreted gene products. In the early embryo, Dpp is bound in a complex containing Short gastrulation (Sog), a BMP-binding protein secreted from the ventral lateral regions. This complex inhibits binding of Dpp to its receptors in lateral regions but, at the same time, it facilitates long-range ligand diffusion, shuttling Dpp from the lateral domain towards the midline. A critical component that helps create flux and provides directionality is the processing of Sog by Tolloid (Tld), a metalloprotease of the BMP-1 family expressed in the dorsal domain. Tld cleaves Sog when complexed with Dpp and releases the ligand. The net movement of Dpp dorsally is generated by reiterated cycles of complex formation, diffusion and destruction by Tld. Sog plays both positive and negative roles in regulating BMP activity. The negative role comes from blocking access of ligands to receptors. The positive effect comes from its ability to facilitate Dpp diffusion. Without Sog there is no net movement of Dpp dorsally, the peak signaling domain does not form, the amnioserosa is not specified, and the embryos fail to develop and die. Although Chordin is thought to be the functional homolog of Sog, when introduced into Drosophila it only acts as an inhibitor, and cannot promote long-range Dpp signaling. One biochemical difference between these two molecules is that processing of Sog by Tld requires the BMP ligand as an obligatory co-substrate, while Chordin does not. We propose that Sogs ability to function as a more efficient BMP transporter that results in long-range BMP signaling resides, in molecular terms, in the co-substrate requirements for Tld-mediated Sog degradation. This predicts that a Chordin-like Sog, that is independent of BMP binding for its destruction, would resemble Chordin when introduced in fly embryos, and be less efficient in shuttling of BMP-type ligands. To test this hypothesis we identified and characterized the Tld processing sites in Sog. The requirement for the obligatory co-substrate for Sog processing is thought to indicate a BMP-induced conformational modification that allows the Sog-BMP complex but not Sog alone to fit into the catalytic pocket of the enzyme. To focus on the enzyme-substrate interactions for Sog and Chordin we modeled the Tld catalytic domain using the crystal structures of crayfish Astacin, and human Tld catalytic domains. In spite of limited conservation between Sog and Chordin (40% similarity, 22% identity), we found that several residues are responsible for making Sog destruction dependent on BMP binding, while Chordin is not. Thus, with just a few changes we were able to alter the co-substrate requirements, and generate a Chordin-like Sog (Sog-i), that is independent of BMP binding for its destruction. To test the biological effect of various Sog variants on the BMP morphogen gradient profile we constructed transgenic fly lines that allowed for normal spatial and temporal expression of Sog proteins at endogenous levels. We found that Sog-i fails to generate sharp and highly reproducible BMP gradients along the DV axis in Drosophila;instead it produces shallower profiles, reminiscent of some vertebrate embryos. In collaboration with David Umulis, from Purdue University, we analyzed and quantified the differences in BMP signaling profiles by measuring the spatial-derivative of P-Mad in the cross-section. The slopes for 2x sog-i embryos are noticeably shallower than wild type (wt), but not equivalent to a decrease in the total amount of Sog protein, i.e. sog+/- embryos. The P-Mad profile in sog+/- is wider, but the steepness of the BMP activity gradient is similar to the steepness of the wt gradient. In contrast, the slope of the P-Mad profile in 2x sog-i embryos is significantly lower than wt embryos near where their peaks overlap and greater than wt in the lateral dorsal ectoderm Such changes in the gradient profiles had a major impact on Drosophila patterning as it affected cell fate allocation and tissue size. For example, the sharp and narrow BMP signaling domain in wt embryos induces formation of an amnioserosa field of approximately 200 cells in stage 13 embryos. Replacement of endogenous sog with sog-i produces a statistically significant increase in the amnioserosa field (300 cells). The biological consequences of replacing Sog with Sog-i could not be explained simply by differences in Sog protein levels between the sog-wt and sog-i transgenes. The P-Mad positive domains in embryos with 4 copies of sog-i remain wide, the boundaries diffuse and the slopes of the cross-section profiles reduced. Moreover, our comparison between sog-wt and sog-i embryos suggests that BMP-dependent Sog processing reduces embryo-to-embryo variability in P-Mad levels and amnioserosa fields. When we calculated the coefficient of variation (standard deviation/width) within each genotype, we found that embryos with two or four sog-wt copies showed less variability in signaling width and amnioserosa fields than their sog-i counterparts. Our results indicate that a Chordin-like Sog is less able to reliably support patterning of the early Drosophila embryo. Thus, the acquisition of BMP-dependent Sog processing during evolution facilitated long-range ligand diffusion and formation of the robust, bi-stable BMP morphogen gradients required for early Drosophila patterning. Our data reveal how different molecular features of the BMP transporters are important during evolution to allow for diverse patterning capabilities to be developed. Since BMPs are key molecules in many developing tissues, altering the BMPs distribution rather than the ligands themselves appears to be a less intrusive process for generating the diversified morphology.